Housing Market Speculation and Firm Productivity: Evidence from China

Yu, Qianhui; Chen, Yanying; Feng, Liang

doi:10.1111/cwe.12384

Cited by 4 publications

(1 citation statement)

References 51 publications

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“…Unlike other literature on China's housing market (Wu et al, 2016;Deng et al, 2017;Yu. et at., 2021), this paper analyzes how the housing boom has infl uenced the growth of China's manufacturing export based on the Dutch disease theory.…”

Section: Introductionmentioning

confidence: 95%

Housing Boom, Dutch Disease, and the Decline in China's Manufacturing Exports

Liu

Tong

2023

China and World Economy

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Drawing on Dutch disease theory, we assess how the recent housing boom has contributed to a decline in China's manufacturing exports. Using Chinese city and enterprise panel data from 2004 to 2013, our analysis reveals that Dutch disease indeed exists and that the housing price increase has played a very important role in affecting China's manufacturing exports through two key channels: resource movement eff ect and spending eff ect. Specifi cally, this paper found that: (i) the housing price increase hindered labor flowing into China's manufacturing industry (resource movement effect) and caused higher inflation (spending effect); (ii) the housing boom clearly impeded China's manufacturing exports, especially after the outbreak of the global economic crisis in 2008;(iii) the impacts of the housing price increase on China's manufacturing exports were heterogenous, and were more significant for labor-intensive manufacturing businesses, businesses that were foreign owned, less R&D intensive, or located in the central and western regions.

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Section: Introductionmentioning

confidence: 95%

Housing Boom, Dutch Disease, and the Decline in China's Manufacturing Exports

Liu

Tong

2023

China and World Economy

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Cross Border Costs: Efficiency Losses of Manufacturing Firms Involved in Housing

Wu,

Kuang,

Sun

et al. 2024

Manage Decis Econ

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The boom in China's real estate market in the past 20 years has attracted a large number of manufacturing firms to make real estate investments (REI), and it is unclear whether this behavior is conducive to the high‐quality development of firms. This study theoretically elucidates the mechanism by which manufacturing firms' real estate investment behavior affects their factor efficiency and empirically examines it using data from listed Chinese manufacturing firms from 2007 to 2021. We find that real estate investment by manufacturing firms significantly inhibits firms' total factor productivity (TFP). The robustness of the findings is further confirmed by constructing a differences‐in‐differences (DID) model using a purchase restriction policy as an exogenous shock. Heterogeneity analysis shows that those more significantly negatively affected are technology‐ and labor‐intensive non‐state‐owned firms, which are located in the central‐eastern region of China and are in the growth or maturity stage. Exploring the mechanism of action reveals that firms' real estate investment behavior may reduce the level of firms' TFP by crowding out inputs in the research and development (R&D) sector and reducing organizational management effectiveness. This study provides new empirical evidence for identifying the impact of real estate investment on firms' TFP and deepens the understanding of firms' resource allocation effects.

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